American income rises 7 percent even as economy sees its sharpest slump ever

Americans are saving their money during an economic crisis they aren't sure will end anytime soon.

The U.S. GDP fell 9.5 percent in the second quarter from the first, and 32.9 percent year over year, Bureau of Economic Analysis data released Thursday indicates. That's the sharpest decline the economy has seen since the 1940s, as even though the Great Depression's economy dipped further, it was spread out over a longer period, Bloomberg reports.

The numbers are close to economists' expectations of a 34.5 percent drop for the quarter. A massive 34.6 percent annualized drop in personal spending is largely to blame for the contraction, as it makes up about two-thirds of GDP determinations.

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At the same time, though, personal income rose 7.3 percent from Q1 to Q2, likely due to federal stimulus payments, unemployment benefit boosts, and PPP loans to businesses. The personal savings rate also rose to an unprecedented 25.7 percent as Americans prepared for the economic downturn and had no idea when it would end. Kathryn Krawczyk